Board Topic: Consolidating during construction, Use equity to consolidate
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Consolidating during construction

Posted by: mike Oct 22 2003, 08:03 AM
I am 6 months into a major renovation on our house, with about 3 to go. We've covered extras with savings, and now credit cards. Is there any loan out there that can use my equity of the finished project appraisal(as used by the construction loan company) to consolidate these bills with the intention of refinancing into one loan in 4-5 months?

Posted by: loanuniverse Oct 22 2003, 03:44 PM
Mike:

As long as you understand that I am not a residential lender, here is my take into your situation.

Assuming the following:

-That you have financed this renovation with your own money. {not sure if you got a loan for a portion of the cost of renovations}
-That there is not much a cushion between the value of your house {without accounting for the renovations} and your current mortgage.

Then I see a problem with getting this kind of bridge loan by relying on the finished project estimated value. To begin with, it is not finished.

Do not get me wrong, I am sure there is a way to do this and I am sure that a good residential lender can find a way to do it. Personally, I would try to either get a home equity line if there is enough equity available, or wait until the construction is done to put it all under a big refinance if the rate in my current mortgage could also be improved.

You should consult with a local residential lender, and donít be late on any of those credit card payments or you might end up paying more when it comes time to do your loan.

Hope this helps.

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